Despite unpaid invoices and an average bad debt of €25,292, Irish SMEs remain committed to investment

Almost four in ten Irish SMEs had to write off bad debt in the last 12 months

New research from Bibby Financial Services reveals that 38% of Irish SMEs have written off bad debt in the past year, with the average amount written off totalling €25,292, a 28% drop compared to the previous year.

While this marks a modest improvement in the scale of losses, bad debt continues to be a challenge, particularly for businesses in the manufacturing (53%), wholesale (44%), transport (40%) and construction (37%) sectors.

Key Findings from the 2025 SME Confidence Report

• €25,292: Average value of bad debt written off, down 28% year-on-year
• 67% of SMEs affected by bad debt are operating at a loss
• 65% report slower customer payments compared to 2024
• €72,000: Average value of outstanding invoices
• 92% of SMEs plan to invest in growth, tech, and talent in 2025

Cashflow Pressure Continues

Among SMEs hit by bad debt, 42% say they lack the cashflow needed to grow, while 62% don’t have sufficient liquidity for day-to-day operations.

Customer payment delays are compounding the issue, with nearly two-thirds (65%) saying invoices are being settled more slowly than a year ago. Construction businesses are feeling it most, with 72% experiencing longer payment times. Meanwhile, the wholesale sector reports the highest average value of unpaid invoices at €102,000.

Insolvencies Impacting Customers and Suppliers

Financial strain isn’t limited to unpaid invoices.

• 17% of SMEs say three to five of their customers have become insolvent or stopped trading in the past year
• 34% have experienced supplier insolvency, up 4% from 2024

This disruption underscores the wider knock-on effects of economic instability for Irish SMEs.

Funding Remains Challenging But Investment Plans Are Strong

While 48% of SMEs say it's still difficult to access funding, this is a slight improvement from 56% in 2024. Still, 51% believe lenders are less willing to finance small businesses than they were six months ago, even as demand for external funding grows.

Encouragingly, 92% of Irish SMEs say they plan to invest in 2025, with an average investment amount of €193,000. The drive to improve talent, systems, and infrastructure suggests that despite financial headwinds, SMEs are firmly focused on future growth.

Aoife McGinley, Head of Client Services at Bibby Financial Services Ireland, said: “It’s clear from this year’s research that Irish SMEs continue to face real financial pressure, with 38% reporting bad debt in the last 12 months, and more than two-thirds (67%) of those affected saying they are now running at a loss. Cashflow remains a major concern, with 62% lacking the liquidity they need for day-to-day operations, and an average of €72,000 tied up in unpaid invoices.

Yet, what’s truly remarkable is the resilience and intent to grow, 92% of SMEs are planning to invest in the coming months, with talent and technology high on the agenda. At Bibby Financial Services, we are committed to supporting these businesses with the funding solutions they need to overcome barriers, unlock working capital, and pursue ambitious growth plans in 2025 and beyond.”

About Bibby Financial Services Ireland

Bibby Financial Services is Ireland’s largest independent provider of financial funding solutions to Irish SMEs. Operating across the island of Ireland for 18+ years, the company, on average, facilitates over €1m+ a week in new funding limits – in addition to the millions in weekly payments to existing clients - to enable a range of scenarios including cashflow funding, growth and expansion, management buy-ins and buy-outs, refinancing, corporate restructuring and mergers and acquisitions.